One interesting proposal I recently heard is the elimination of income tax. Many people feel that the system of income tax, especially the idea of graduated income tax and tax brackets, is unfair. They say that it's unfair that the more affluent people pay a higher percentage income tax than the poorer people.
In one more specific plan, income tax would be replaced by a sales tax, like we have in California (although much higher). Like state sales tax, costs like food, medicine and rent would be exempted, so that poorer people would not be hurt by having to pay high sales tax on their basic needs.
I think this is a interesting proposal. One positive is that people who don't pay taxes currently (like drug dealers or other criminals) would be basically forced to pay taxes whenever they buy something. Less time would be wasted filling out and processing income tax forms. It would be easier to enforce tax laws. Also, the more people spend, the more tax they would pay, which seems fair. And everyone would have more money in their pockets.
While I doubt such a reform would ever happen, I think the idea has merit.
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5 comments:
I forgot to mention a few negatives:
People wouldn't have an incentive to donate to charities.
People wouldn't be able to get tax breaks by paying the mortgage on their houses, and could lower the price of real estate. Purchasing real estate is a stabilizing factor in our society and there would be less incentive to purchase real estate if there were no tax breaks.
A higher sales tax on everything minus food, rent and medicine? No thanks. The super-rich can afford to pay higher percentages on their income. Their small sacrifices are nowhere near as harsh as the reality that poorer are forced to live in. The income tax we have now is a fair equalizer that helps the underprivileged.
completely eliminating the income tax is too extreme. The poor are already struggling to pay for basics (food, medicine, rent etc.) and a lot of people receive food stamps. Eliminating the income tax would mean less money going to the government to fund government programs. Also, its not fair for people with big families that need to spend a lot because they'll need to buy more clothes, food, etc. if sales tax is significantly raised only rich people will be able to have a lot of kids
IT sure sounds simpler than our current tax system...
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